In the real estate market, it’s always either a buyer’s or a seller’s market. Whether you are buying or selling a home, it is crucial that you fully understand the type of market you are in. Evidently, the market shift has been the topic of discussion for a very long time. However, the relative scarcity of offers on the houses also prompts a query that has been dominating headlines and baffling consumers: Are we still in a sellers’ market? Or maybe a buyer’s market has started to emerge? Ultimately, is now a good time to buy a house in general?
To draw a distinction between a buyer’s market and a seller’s market, we can draw back to one of the fundamental cores of economics: supply and demand. Now here are some indicators to determine if a market is a buyer’s or a seller’s market.
1. Market Inventory
Examine the properties that are on the market right now. The probability that your area is seeing a buyer’s market rises with the size of the inventory. On the other hand, if there don’t seem to be many homes listed, it’s probably a seller’s market.
2. Percentage of properties reduced in price while they were listed
When homes are selling for nearly what they were originally listed for, there is a high demand for real estate. However, if a significant portion of sellers drops their initial asking price, that may indicate that the market is beginning to change in favor of buyers.
3. Recent Sales
Examine the most recent sales of properties that are similar to yours or the one you are interested in. Homes selling frequently above the asking price is a solid sign that the market is in favor of sellers. If they have been trading for less than asking, a buyer’s market is likely.
4. Length of time on the market
Another reliable indicator of the state of the housing market is the length of time a home has been on the market. In a seller’s market, homes sell more quickly, whereas contracts are signed more slowly in a buyer’s market.
5. Market trends
The best way to check if it’s a seller’s or buyer’s market in your neighborhood is to look at whether property prices there have been rising or falling recently. Examining market trend reports is the simplest technique to determine if property prices are rising or declining.
The quick answer to all the questions above is that the seller’s market generally continues. However, the market is far more complex, and the tide is turning swiftly in favor of buyers. As buyers have greater negotiating power, several industry practices that dwindled during the high crisis years are returning, and different types of properties or localities are performing quite differently during the same period. In other words, there may have been instances where buyers had the initial advantage. The market “is absolutely moving toward buyers today,” according to James Becker, CEO of the investment firm and business incubator Fusion Growth Partners. He stated:
“It’s certainly tilted in the buyers’ position, but this is still, as of today’s date, a seller’s market. If a seller wants to be able to sell their home they’re going to be able to sell it.”
The national housing market will most likely be affected by rising interest rates more than any other factor. Despite the fact that sellers continue to be in a favorable position, stability and the persistence of low interest rates may give buyers some much-needed relief. However, even while there is a record-high demand for new homes, there is a record-low volume of them on the market.
It is no secret that the market is changing, and just recently, new statistics revealed, among other things, that there is less competition for homes, sales have decreased, and the building industry is slowing down quickly. According to a recent Zillow analysis, these circumstances suggest that buyers are “gaining time and options as competition eases.”
In spite of many concerns, a recent survey revealed that the majority of Americans continue to believe that now is an excellent time to buy a home. We are observing a trend where buyers have increasing power. Homebuyers have noticed some market indications of optimism, which suggests that the market is regaining its balance.
“What we see is that it is transitioning pretty rapidly from a seller’s market by any definition to a more balanced market.”
York Baur, CEO of real estate technology firm Moxiworks
The Bottom Line:
Knowing the state of the market is helpful when purchasing or selling real estate. In a buyer’s market, there will be a surplus of available properties and less competition, making it ideal for buyers to acquire a home. However, as a seller, you’ll be wanting to list your home in a seller’s market, when there are fewer homes for sale and a lot of prospective buyers. It can take a lot of time to evaluate all of the aforementioned factors, especially if you are unfamiliar with the housing market. The best approach to negotiating the housing market, regardless of the circumstances in your location, is to work with a real estate professional. Don’t just rely on news reports about the housing market at large. You’ll want to have an advantage over the competition whether the market is strong or weak, and real estate agents have the information and abilities required to make sure you do.
What To Do:
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